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Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
 For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a nationwide lockdown on 25 March, the country’s daily average power output has been 20% lower than the three-year seasonal average. It estimates power sector coal usage may have fallen by as much as 10mt of NAR 5,000 kcal/kg-equivalent coal to 30mt in April. McCloskey Coal reports that India’s coal stockpile is at 165mt and that nearly half (80mt) is at CIL and other mines. This amount represents 30 to 40 days use. Power plant stocks were at 50mt,which is enough for 29 days. Other indicators, such as imports, domestic coal output, and power and steel output, all point to a large year-on-year decline for India’s coal imports.
Industry observers expect a 20%year-on-yearfall in 2020 India’s coal imports. This is in line with our forecast, but we believe there may be further downside risks. As a result of these, IEEFA expects India to import less Indonesian coal, based on our evaluation of the following four key variables:
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Coal imports: After recording year-on-year growth for January, coal imports experienced year-on-year declines for three months, with March and April down 28% and 29%, respectively.
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Domestic coal production: Coal production from CIL, the largest producer, increased 9.5% year-on-year for the first quarter of 2020.
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Power generation: Thermal power generation fell 1.5% year-on-year in the first quarter of 2020 and total power generation was down 32% year-on-year in April.
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Steel output: From January to April, output was down 20% year-on-year, with April declining 65% year-on-year.
Unlike China, where January to April 2020 coal imports rose, Indian coal imports for the same period were down 18% year-on-year. India’s coal imports have recorded year-on-year declines since February as COIVD-19 disrupted consumption and even the logistics of coal. This is despite average monthly coal benchmark prices falling at least 29% year-on-year over the same period.
According to media reports, CIL’s first quarter of 2020coal production increased 9.5% year-on-year. Although this slowed down to a daily rate of 1.3mt for the first 22 days of April, down 11% year-on-year, these strong gains are bad news for coal exporters to India. The Indian Government has announced measures that are similar to the Chinese Government’s coal import quota. In May, CIL was mandated to replace 100mt (40% of CY2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year.
For the period January to April2020, India’s total power output was down 7.4% year-on-year and its first quarter 2020 thermal power output was down 1.5% year-on-year. We note that total power output recorded an 8.2% year-on-year decline for March and thermal power output fell 12.9% year-on-year. In April, total power output was down 32.4% year-on-year. Data for thermal power output is not yet available but should also be significantly down, in line with total power output.
These falls would be consistent with the year-on-year decline in coal imports since February and the build-up of stockpiles at CIL and power plants.
India’s steel output acts as an indicator of economic activity. Between January and April, February was the only month that recorded a year-on-year rise in steel output, a modest 1.5%. Steel output recorded year-on-year declines of 13.8% in March and 65.2% in April, due to the full month of lockdown that started on 25 March. Against the backdrop of an increase in domestic coal production in the first quarter of 2020, a build-up of coal stockpiles and a fall in power generation, this level of economic activity presents significant downside risks to India coal imports.
The Indian Government has adopted a policy that supports its domestic coal sector, calling for import reductions. In May 2020, CIL was mandated to replace 100mt of coal (40% of CY 2019 coal imports) with domestic non-coking coal for the 2020–21 fiscal year. CIL’s first quarter 2020 output grew 9.5% year-on-year, presenting a significant risk to Indian coal imports. The risk is greater for Indonesia, because it exports mainly thermal coal. We believe India may have to continue importing coking coal for steel making because its domestic producers mainly supply thermal coal. Industry observers have estimated a 20% year-on-year decline in India’s coal imports. We agree, but also warn that there is a risk of a larger fall.
About IEEFA
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. www.ieefa.org
About the Author Ghee Peh
Financial Analyst
Ghee Peh has worked in investment research since 1995, including at Jefferies, BNP Paribas, and UBS. He has covered Asian coal, cement and metal companies.
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Thursday, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
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Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 160,000 Metric Tons (MT) Low Calorific Value Coal for J ...
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- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
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